Tuesday, 23 December 2008

The Hunting Begins

By this time, the 50 billion Madoff financial scandal does not surprise anybody anymore given that trillions of dollars had disappeared from the financial markets of the world. While questions around the scheme are not yet answered, especially on the role of SEC, the fact remains that even the smartest of investors such as HSBC trusted him and lost huge sums of money. Even Jewish educational institutions and charities were not spared.

Forensic accountants are now hunting for what is left in the attempt to recover the lost loot. It will be interesting to observe how much would eventually be recovered and returned to the "unfortunate" investors. In addition to that, some investors are already suing accounting firms for negligent.

In spite of the preaching about corporate governance and the introduction of laws like SarbanesOxley, people would be the ones that actualise the spirit of corporate governance. Even if all the boxes could be ticked, if the hearts and minds of those given the trust are compromised, similar stories like the present Madoff episode would continue to appear in the future. How many of those in charge of governance of organisations are fit and proper to do a good job? Their CVs may be impressive but doing a good job goes beyond that, it is about having real performance. It is about having understanding of the organisations and their surroundings, understanding strategic objectives, knowing risks, asking tough questions and demanding actions from the executive teams. If they don't think they can be different from others on the basis of principles and truths, maybe they should be reconsidering why they continue to serve their positions?

So, what are you doing to address the "heart" issue in the organisation that you are in now?